Benefits of Recruiting Expatriate Workers

Expatriate workers refers to people who leave their countries for other countries to apply their skills and professionalism in different fields of employment. In Saudi Arabia, it was predicted that in 2013 the number of foreign workers was about 9 million people. The number of these expatriate workers in the Country rose after the discovery of oil in late 1930s (Black & Gregersen, 2011). At first, the expatriates in Saudi Arabia came from Arab and Western technical who have strong personnel in administrative and professionalism fields, but as time went by, those from South Asia started arriving in the country in larger numbers and occupied the places of other expatriates in other countries. It is thus revealed that Saudi Arabia is currently dependent on labor from abroad. Although some foreign workers are employed in positions that need technicality, most of them now work as agriculturalists, cleaners and domestic service providers. This paper therefore explains the benefits and risks involved with dependence on large numbers of Expatriates in the country, the reasons why Saudi Arabia should include labor mobility and the implications of Saudi Arabia vision 2030 on labor mobility.

There are various benefits of recruiting the large numbers of expats in Saudi Arabia and these include;

Government revenue; the revenue of the country is increased through taxing the expatriates. This helps the government to provide marginal services especially the community services. In addition, International friendship among countries increases through recruiting employees from other countries such as from Africa, Philippine among others, there is creation of friendships. This therefore improves on the trade among the countries thus increasing on the foreign exchange (Sterle et al, 2018).

Furthermore, International Experience is observed. It is evident on the role that is played by an expatriate, it yields various professional skills which ensures the best personnel are employed for a specific position (Sterle et al, 2018). Besides, the expatriate workers provide in most cases the unique individual qualities which in turn contributes to the overall completion of the projects and assigned tasks in time in the country (Carey, 2018). Therefore, by referring the features of problem solving, adaptability and resilience, to reside abroad is considered as an asset to the company which employs the expats.

Also, better chances of recruiting employees in the newly business in the specified local geographical area are high, it is difficult to choose the kind of labor to fit the established firms. It is very easy for the local market to look for indigenous workers through media and recruitment agency, there is always a lack of soft skilled personnel thus forcing the country to recruit from abroad (Brewster, 2014). Most significant is that by opening the horizons on the global basis, it offers the opportunity to acquire ideal personnel for various educational and professional backgrounds.

International Experience

Most significantly, there is existence of inner motivation. It is observed that, expats tend to become daring people, self-motivated who take their lives as a bigger image. This is because it shows the sign of courageous to leave the country of comfort and their beloved families thus giving the best while at work places (Brewster, 2014). However, the situation of moving abroad is attributed with pros and cons as well that makes the expats grow stronger and depict good picture.

Finally, the recruitment of expats shows appropriate expertise. If there is an entrepreneur who is initiating any business for products and services in the country, it is not easy to engage all the local workers in the newly introduced business for the aim of achieving values and visions set. This is because an international employee might have worked before in a related field who is likely to even bring new ideas to add on the planned ones (Araci, 2015). This helps to combine the set goals with the introduced ideas that in turn help to alter the concept of the business forward.

Increased costs incurred in hiring foreign workers, many countries including Saudi Arabia face challenges of costs in employing expatriate workers (Black & Gregersen, 2011).  These costs are as a result of relocation, allowances of transport, accommodation, health insurances and sponsorship of visa. Also, expats may lead to time wastage since they may not be available at the moment (Sarfraz  & Liu, 2015). In addition, many numbers of expatriate workers may lead to repatriation of profits from Saudi Arabia to other countries that may even be more developed and itself and in turn this negatively affects the economic and financial status of the country.

Furthermore, depending on several expatriate workers leads to increase of foreign investments, this hinders the growth of firms owned by the locals or the government and gives a chance to those foreign industries to develop (Sarfraz  & Liu, 2015). Many of these local firms end up vanishing and thus the country loses market for its products. Also, loss of jobs by the local citizens is another risk that could be faced by the country after employing a numerous number of expatriate workers (Black & Gregersen, 2011). When many of these expats are employed, they replace the local workers since they are more skilled than the locals.

In future regional free trade agreements, Saudi Arabia should include labor mobility. The reason is because the country has very many people who need to transfer their professionalism to other countries. The country will be able to reduce on the level of dependence on the government and other workers (Alkhamis et al, 2017). 

Better Chances of Recruiting Employees in the Newly Business

Currently, Saudi Arabian government released its 2030 vision that contains all the targets and ‘ambitious plans’. According to Mohammed bin Salman, the deputy crown price of Saudi Arabia, the dependence of the country on other countries for oil is predicted to end by 2020 (Khan, 2018).

Basing on the 2030 vision, there was a suggestion that all the expats within Saudi Arabia should obtain green cards so as to end the system of sponsorship. This implies that there will be a reduction in labor abuse within the country. Another implication of the vision is that very many young citizens of Saudi Arabia will be employed and the growth rate of the economic activities in the country will develop at 12.7% (Alkhamis et al, 2017). Taking into consideration that the unemployment rate among the Saudis below 30 years of age is 29%, creation of jobs for the citizens is among the main economic reforms. Due to the sharp increase in the youth population, time wastage is being fought and about 2/3 of the current population is under 30 years of age (Khan, 2018). Today, 1.9 million Saudis are set to acquire jobs in the coming decade according to the 2030 vision.  Although, privatization only can never solve the problem of unemployment in the country due to the persistent population increase that is currently about 29 million people (Dahim, 2018).

Trend of the labor Mobility in Saudi Arabia

Figure 1: Non-Saudis and Saudis residents from 1974-2017 

Source: World Bank.  2018

Figure 1 shows the resident population categorized by the non-residents and residents of Saudi Arabia from 1974 to 2017. The figure shows a positive increase of non-nationals or expatriates from 1974 to 2017. This means that Saudi Arabia to a greater extent depends on the expatriates in most of her industries and sectors.

It is evident in 2017 the expatriates were estimated to be 59% of the total world international population of migrants. Besides, to leave the local country to work abroad is one of the major attributors of international migration.   This can be caused by the inequalities in the economies as well as seeking for employment opportunities. More so, the influence of economic, environmental and political crises among various countries increases on the scourge of expatriates in Saudi Arabia

 

Table 1: Population of Expatriates of Saudi Arabia from 2017 to 2018

Source: World Bank.  2018

Table 1 above shows data about expatriates in Saudi Arabia from 2017 to 2018. It is evident that above 30 percent of Saudi Arabia’s population are expats. It is also estimated that the total number of expatriates in the country is around 10,736,293. More so, the quarter of the total number of expatriates are the Syrians hiding away from the war from their mother countries who in turn get jobs in Saudi Arabia (Source: World Bank.  2018). Furthermore, the estimate of 2.5 million expats from Syria living in Saudi Arabia access free healthcare and education plus taking some of the prevailing jobs in the country.

Inner Motivation

Most surprising is that, Indians are considered to be the second to reside in Saudi Arabia among the non-residents. Also, it is evident that 1.5 million expats from India living in Saudi Arabia who are employed particularly in Mining and hospitality sectors. Therefore, Saudi Arabia is considered as one of the greatest market with unskilled workers from Pakistan. Besides, Saudi Arabia inhabits over 1.06 million Pakistanis who offer mostly unskilled labor in various sectors such as construction, security among others (Source: World Bank.  2018).

Furthermore, the Egyptians who live in Saudi Arabia are estimated to be over 1.06 million people whereas the Yemenis estimated to be 1 million. More so, the Bangladeshis take another important role in the labor industry of Saudi Arabia since they are also estimated to be 0.71 million people. Other expats originate from Philippine, Sri Lanka, Indonesia, Sudan, Turkey among others. Therefore, a bigger percentage of the Saudi Arabia’s workforce is recruited in the oil sector and mining as whole. This therefore, has made the kingdom of Saudi Arabia to become one of the leading oil exporters which accounts for over 2.7% of the oil as well as becoming the second producer (Kagan & Campbell, 2015). However, this is attributed due to the existence of both unskilled and skilled labor offered by the immigrants or expats. In summary, Saudi Arabia is experiencing the rapid transformation of socio-economic change caused by the increasing number of expats in the country.

Conclusion

In conclusion, the expatriates in Saudi Arabia offer both benefits and risks to the economy. However, the pros’ outcomes outweigh the cons. The government of the republic of Saudi Arabia should put measures in protecting potential opportunities to some jobs for her people in order to improve their standards of living. Also in Saudi Arabia, the hierarchy of workers from foreign countries depends on the country of origin. Besides the Saudis, those who also hold the most top positions are workers from Arab and those from western countries. However, workers from Africa and Southeast Asia occupy the lowest positions. On this issue, legal bodies have criticized the government of Saudi Arabia by because of the poor treatment for the expatriate workers. In addition, at the end of 2016 the number of expatriates in Saudi Arabia reduced from 8.55 million people to only 6.66 million workers. Nevertheless, some sections of work like domestic helpers have registered an increase in population of about 3.11 percent. According to the latest statistics from the government statistics agency, about 1.2 million foreign workers were predicted to have left the Saudi Arabian workforce from 2017 to 2018. Even though Saudi Arabian government has fought to reduce on the number of foreign workers for quite a number of years, the system has failed to operate since the Saudis are too lazy, reluctant and lack skills of doing work. For example in 2000, the government commanded that the workforce in any company should at least comprise of 25% of Saudis. It has been argued that the reason for increased Saudi Arabian unemployed people is the weakness within the education system of the country that emphasizes religion more. The economy of Saudi Arabia has thus stuck on westerners for expertise in large manufacturing companies and other Asians to work in the construction companies and other unskilled tasks. Also, the Saudis are not willing to take on some forms of jobs and also have no social values to corporate with non citizens.

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